Ever heard of black markets? There are ways around any tax scheme. We were funded by import duties and excise taxes until 1913 (except for a few years during the Civil War when an illegal income tax was imposed).
Dave Hall
Doug, you hit the tax nail squarely on the tax head. Sales tax. No estate taxes raping your loved ones when you try to pass on all you've worked for your whole life (*that's* a story I could tell), no Internal Revenue Freaking Service tracking down all us do-a-side-job-for-cash-occasionally guys, no complex tax issues and no tax lawyers. A straight percentage of sales price on everything you buy.
How many millions of dollars a year would federal and state governments save in payroll, facilities, etc. by the abolition of the ENTIRE Internal Revenue Service?
I agree with you, Jay. We need police, fire, water and the like. We also need, however, to simplify our current system.
Also, thanks to everyone who replied. I'm clear as mud on the issue now .
-Phil Crow
Yeah. Now I'll have a nightmare tonight. That thing will be a lot better, and safer, when it is completed. I hope it will, anyway, though I expect to be long gone from the area by then.
Where does the money for school lunch funding come from? Why are so many school districts so frightened of dropping student enrolments? Is all that a state funding set-up? Seems to me I've read that much of it is federally funded.
Of course, the feds love to nail state and local agencies with grants. Expand like crazy with whopping 2 year grants. At the end of 2 years you've got the choice of letting the new stuff and staff go or paying for it yourself. Bedford County, VA, has bought into this heavily with their sheriff's dept. Ex-FBI agent elected shurf. Ever since, the dept. has been expanding on mostly federal grant bucks. Some are due to start running out shortly, and one of the lowest property tax rates in the state is due to go through the roof. Just about the time I get back there, too.
Charlie Self
"Man is a reasoning rather than a reasonable animal." Alexander Hamilton
I'm always interested in such tales. But I know in the past the Feds didn't even start taxing estates until the 600K mark had slipped by. I would guess it's a few bucks higher now. And not all that much was taken. There are special provisions for family farms, too, where land and property values tend to be much greater.
Charlie Self
"Man is a reasoning rather than a reasonable animal." Alexander Hamilton
Not much, actually. The IRS doesn't employ that large a portion of the Federal work force.
The biggest savings would come in the disappearance of the burden of complying with that silly-ass overgrown tax code. _That_ would be enormous.
-- Doug Miller (alphageek at milmac dot com)
How come we choose from just two people to run for president and 50 for Miss America?
School Lunch and Breakfast programs are funded by a combination of federal, state, and local tax dollars as well as the sale price of lunches. In our district approximately 15% of the food service program is from federal funding, with a substantial portion of that coming from food donations (this is actually farm welfare where the feds set a minimum price for certain commodities and if farmers can't sell what they grow for that price they sell it to the feds. the feds then use it to donate to schools, for armed services, prisons , etc.). Obviously, federal funds are focused on poorer school districts and the poorest inner city schools and poor rural schools will get a higher percentage of both education dollars as well as school lunch dollars (free and reduced lunch subsidies for poor families). Still, nationally I believe that federal funding amounts to considerably less than 5% of total K-12 education spending. Mostly for remedial programs such as Title I reading and math, IDEA special education, and some teacher continuing education programs (as well as the lunch/breakfast programs). The vast majority of school funding in many states is state funding. West Virginia funds a significant majority of school spending, with local taxes
- i.e. excess levies and bond levies- funding a small percentage. Other states such as Pennsylvania focus a large percentage of school costs on local taxpayers. PA state funding is about 35% on average. In my district it is about
18%. Just over 81% of our funding is from local (i.e. municipal or school district specific) taxes - i.e. property taxes, local income taxes, local gross receipts business taxes, amusement taxes, etc. and is heavily weighted toward property taxes. Our local school property tax is 16.5 Mills or 1.65% of assessed market value. This is on top of local municipal property taxes and county property taxes. My total annual property tax is 28 mills or 2.8% of my home's market value. Every state has its own formulas for distributing funding. In many states out west it is very much based on number of students enrolled AND attendance. They tend to spend a lot of money on tracking and enforcement of attendance. In WV I think it is mostly enrollments, number and configuration of buildings, geographic structure (for busing and for distribution of schools). Even the structure of Districts vary widely from state to state. In WV school districts are county-wide. so there are 55 school districts. In PA the districts are much smaller and more numerous. In Allegheny County alone there are 43 school districts - including the rather large city of Pittsburgh District. The state has 501 districts. In Hawaii there is only 1 district - the entire state.So, in a very long winded way I have bored the socks off anyone still reading concerning school funding. For the libertarians amongst us (as well as the states rights folks) schools are still very much a state function as they should be under the US constitution. The feds are constantly encroaching however. Our nice conservative republican Geo. Bush recently passed the "No Child Left Behind Act" which, whether you like its purpose and intent or not, is clearly the largest transfer of eduction control to the federal government in history (without matching funding, by the way). Some may say it is a victory for children, but it is clearly a defeat for constitutional law.
Dave Hall
I believe the minimum is now up to $650,000, but I also believe that the tax rate starts at 35% and goes to 55%. So I don't think it can be stated that " not all that much was taken". While Bushes tax cuts will increase the limits over the next 9 years until the tax is eliminated, in the 10th year it all comes back and the minimum goes back to, I believe, the $600,000 amount.
Dave Hall
Dave Hall notes:
My knowledge of the concept goes back to the early '70s, so a changing eprcentage, or amount, is no surprise. I love that 10 years to eliminate, 11 years to return concept. Brilliant politically, because by the time the taxpayer screwing comes back, the president involved has retired, yet the drops are annual and obvious and make political hay like crazy.
That rate: wonder how many deductions and exceptions there are?
Charlie Self
"Man is a reasoning rather than a reasonable animal." Alexander Hamilton
snipped-for-privacy@aol.comnotforme (Charlie Self) wrote in message news:...
That's what estate attorneys are for, Charlie;) Basically, the deduction (actually a lifetime exclusion) is the $650,000. There is also the $10,000 annual gift exclusion (gifts in excess of the $10,000 are taxed as estate taxes and eat into your $650,000 lifetime exclusion above). The basic estate planning depends on a husband and wife creatively using their $650,000 exclusions so that they get full use of their combined $1.3 million. This of course is little consolation to the unmarried person (another reason that gays want recognition of their "marriages"). While $650,000 seems a lot, ask someone in southern California (or NYC or DC, etc.)with a modest home, a 401K plan and some IRA money. If you own the house and have enough retirement account savings to have enough to make a decent retirement living, your heirs will be paying substantial estate taxes. BTW, your heirs will not only pay a substantial estate tax on the full amount in the IRA's and 401K's, they will also pay income taxes as they take the money out. If they have to cash out the retirement accounts in order to pay the estate taxes, the combined estate and income taxes can be up to 70.75% (55% + (35% x the remaining 45%). There goes quite a bit of that money that dad scrimped and saved to put into retirement accounts. Then you get into life insurance schemes to try to get around estate taxes, buying gold or other "hard" investments that the heirs may not declare in the estate (that's illegal), etc.
Dave Hall
What would happen if families started to "incorporate?"
What is to stop them from doing so now?
They do. Mostly farms. A farmer spends his entire career "Buying retail and selling wholesale" as they say.
Then he passes and his family "inherits" $1M worth of land and machinery and animals. The farm is sold to settle the estate taxes to an agribusiness concern or to a developer.
Then the politicians who write estate tax laws bemoan the loss of the family farm.
The same thing happens to site contractors, who might be a sole proprietership owning a dump truck, a roller loader, and a bulldozer.
I know several farming families who have incorporated in order to avoid just this sort of situation.
more money more tax...........
fat chance!!!
but since I'm stuck with it I would at least like to
to the hilt and the break will be slow and sloppy
They are the IRS. bend over . they will drive!
when it comes to taxes....... expect the worse and you won't be dissapointed. :-]\ skeez
I believe that many family farms are corporations. Still the farmer owns the stock. When he/she dies and leaves the stock to the kids, estate taxes apply. If you incorporate with the corporation owning the house and car, etc. and you owning the stock, when you die the stock must be valued and included in your estate. Believe me, serious and well paid people play the "what-if" game all day long trying to develop and exploit loopholes in the tax structures. If that was a good one, it would heavily utilized.
Dave Hall
Dave Hall responds:
IIRC, family farms get special exclusions. Somehow the figure 4 million sticks. But since I don't and won't have such a farm, that is about all I retained.
Charlie Self
"Man is a reasoning rather than a reasonable animal." Alexander Hamilton
What if the various members do not own stock in the corporation, but simply provide stewardship of the assets? Some members might have more "say" in the matters, as set out in the corporations by-laws. The entity is lead by a board of directors that just happen to require blood or marriage lines.
In the event of death of one of the board of directors, the ownership of the pool of resources is not affected -- the corporation still owns itself one hundred percent.
As time goes by, the membership of the board is filled with family members once they reach the age of majority in their land. In the case of a major disaster causing large scale deaths in the land, and the sole remaining board of director is underage, then that person would have a trustee appointed to oversee the corporations assets until the "sole remaining board of director" (known today as "the inheritor") was of legal age.
The by-laws would have to include verbose legalese verbage such that no one can "cash out," which implies ownership of stock. They could certainly draw an income for "services rendered," and taxed appropriately as personal income.
The net effect is to keep the bulk of the family assets under family control, with drawn off income from the interest or profit from the various corporate activties the corporation finds itself involved with.
Well if Michigan quit sending the federal portion of gasoline taxes and used it to pave Michigan roads, we in Michigan would have better roads. Yes, we are a DONOR State.
Federal Support = FEDERAL DEMANDS
Wes
The most basic fact about Corporations ( or any other profitable entity) is that someone MUST own them (via ownership of their stock for corporations) and that ownership must pass to heirs (or be donated to a charity) upon their death. You can't have an "ownerless" entity with members providing "stewardship" and family succession......except in the case of 501(C)(3) tax exempt entities normally called charities. Needs to have a valid tax exempt purpose to get IRS recognition, regularly expend large percentages of receipts on the charitable purpose, etc. If you can fit that however, there is a bit of a dodge possibility here. I know of a number of companies set up as charities, getting tax deductible donations, whose real purpose is to provide jobs (and eventually pensions) to the people who set them up and to their progeny for as long as they can keep the operation operating. They do, however, have a valid charitable purpose and a substantial portion of the funds raised are expended on the charitable purpose - the "mamagement" just gets pretty nice salaries and benefits and all have the same last names and the Board of Directors also seem quite familiar to each other ;)
Anyone can set up a charitable organization. It isn't really very hard to do if you can come up with some charitable purpose (how about a "Community Woodworking Center"). It is somewhat more difficult to get enough money for your charitable purpose to give yourself a great income while doing enough charity work to retain your tax exempt status and convince fools to keep giving you money.
If you are donating money (or even buying from a charity) always check the background of the charity. Get information on the percentage of funds spent DIRECTLY on the charity. It also doesn't hurt to look at the names of the management and Board members. Lastly, you can check out their Form 990 tax returns somewhere on the IRS website - these will list major management salaries, Board members and give some accounting for expenditures. Just because they have a 501(C)(3) certification from the IRS and are tax deductible doesn't mean that they are a reasonably charitable charity ;)
Dave Hall
Thank you for the detailed follow up.
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